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Is VAT on food on its way?

Posted Jan 31 2013 7:10am

The food and farming charity, Sustain, has come up with the wizard wheeze of taxing sugary soft drinks. Logic suggests the tax would be on the sugar content, as is the case with the alcohol content of booze, and the ramifications of that would be wide-ranging.

The income would pay for free school meals, they argue, and increase the uptake of fruit and vegetables. Now then, hands on heart, how many kids do you know who, if deprived of sugary drinks, would head straight for the apples and carrots? Yep, that’s what I thought.

It’s been repeatedly demonstrated, mainly on tobacco and alcohol, that attempting to impose rationing via taxation does little or nothing to reduce consumption. As for the idea that the revenue raised would pay for free school meals, just how naïve are these clowns? Cameron’s got a new war to pay for, plus whatever commitments he’s about to saddle us with in Algeria.

Anyway, a tax on soft drinks, based on the sugar content, will simply see the taxable sugar replaced with something potentially even more harmful, in the form of artificial sweeteners, like Aspartame . Tax them, and the industry will find something else. What worries me, though, is that levying a tax on sugar  will inevitably raise the prices of many other foods which contain the stuff. After all, you can hardly tax the sugar in, say, Coke, but not in cakes, biscuits, bread, preserves, confectionery, breakfast cereals etc, without leaving the doors wide open to a legal challenge. And a little label reading will show that sugar is almost everywhere and, while there’s an argument to be made that it shouldn’t be, it is, and prices will rise if the stuff is taxed.

It needn’t be that way, as tax could be levied on products which contain more than a specified percentage of sugar – but that leaves an obvious loophole. Much simpler to tax all products containing any sugar at, say, 5 or 10%. And where do you draw the line? At added sugar, or just any sugar, whether added or natural? (Some Sainsbury’s beef is labelled as “Contains natural sugars”.) It’s a minefield, but I can tell you who’ll come out on the wrong end of it no matter what the outcome – the consumer, as always.

Anyway, it’s not the sugary drinks, per se, which are the problem, it’s the sheer volume at which they are consumed – nobody, as in this picture , needs a soft drink bigger than their head. Or at all for that matter, but we all need our treats, whether it’s a sugary drink, chocolate – now there’s an industry that would be trashed by a tax on sugar – or alcohol (already massively taxed).

I’ve seen it argued that parents should control what their kids drink, and while that can be done at home, once they’re out of the house, there’s no control possible short of not giving them any pocket money, and even that’s not infallible.

It would also be, like the “Pasty Tax” before it, the thin end of a general food taxation wedge. Like the destruction of the welfare state, and the NHS, taxing every bloody thing is a Tory wet dream (they’d tax sex if they could find somewhere to fit a meter), and they’d just love the chance to apply VAT to food. The pasty tax was patently absurd and unenforceable, but a tax on the sugar content of oversweet drinks already has a lot of support (some 60 organisations are already backing the idea).

So this is clearly an idea with legs, and if the government gets away with this tax (the fat fascists, like Tory MP Anna Soubry, will be all over this like flies on a dead dog), the principle of taxing food will become established and, in a relatively short time – especially if the Tories get a majority in 2015 (by no means impossible, as I’ve shown here ) – I have little doubt that VAT, perhaps at a lower rate, will be extended to all food. Let’s face it, the amount of VAT we pay can be minimised, to a degree, by careful shopping and not buying stuff we really don’t need (rather than just want), but everybody has to buy food.

It’s too good a chance to pass up – and to hell with the suffering and deprivation it will inevitably cause – loads of new money pumped into the system at minimal cost.

Except to us…

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